The Federal Reserve’s recent rate cut announcement during the FOMC meeting triggered a Bitcoin dip after Fed rate cut, leading to over $300 million in liquidations as Bitcoin fell below $107,000. Binance founder Changpeng Zhao warned of more dips ahead amid market volatility.
Key Impact: Bitcoin experienced its worst October performance in seven years, dropping 6.8% overall.
Short-term holders drove the selloff, with over 10,000 BTC flowing into exchanges like Binance during the dip.
Liquidations reached $377 million in 24 hours, affecting the broader crypto market cap which slipped to $3.69 trillion, per CoinMarketCap data.
Explore the Bitcoin dip after Fed rate cut: How Powell’s speech sparked $300M liquidations and market turmoil. Discover on-chain insights and recovery signals for crypto investors today.
What Caused the Bitcoin Dip After Fed Rate Cut?
Bitcoin dip after Fed rate cut was primarily sparked by Federal Reserve Chairman Jerome Powell’s speech at the FOMC meeting, which delivered unexpectedly cautious signals on future monetary policy. Despite a 0.25 percentage point reduction in the key lending rate to 3.75%-4%, the lowest in three years, the tone hinted at persistent economic challenges, leading to immediate selloffs in risk assets like cryptocurrencies. This resulted in Bitcoin plunging below $107,000 and over $300 million in market liquidations within hours.
How Did On-Chain Data Reveal the Nature of This Selloff?
The Bitcoin dip after Fed rate cut highlighted a clear divide between short-term speculators and long-term holders, based on on-chain metrics from platforms like Binance. Data from CryptoQuant showed that over 10,000 BTC, specifically 10,009 BTC from coins held less than 24 hours, flooded into exchange wallets during the volatility—indicative of “hot money” reacting swiftly to Powell’s remarks. In contrast, long-term holders with coins aged over six months remained largely inactive, signaling a mere shakeout of weaker positions rather than a broader loss of confidence. Analyst CryptoOnChain noted, “This was a textbook shakeout of weak hands, not a loss of conviction from long-term players. The underlying structure remains strong.” Such patterns suggest resilience, with the scarcity index rising as whales reportedly moved BTC to private wallets, potentially curbing further downside. Ethereum followed suit, declining 1.7% to about $3,850, while the total crypto market cap dipped 0.46% to $3.69 trillion, according to CoinMarketCap figures. Market observer Immortal Crypto pointed out that October 2025 marked Bitcoin’s first red month in seven years, with a 6.8% overall decline, breaking the traditional “Uptober” optimism.
Many dips along the way.
— CZ 🔶 BNB (@cz_binance) October 31, 2025
The selloff extended beyond the immediate FOMC reaction, influenced by broader geopolitical tensions. Earlier in the month, on October 10, a massive liquidation event erased over $19 billion in open positions, the largest on record per analytics from CoinGlass. This was tied to U.S. President Donald Trump’s threats of 100% tariffs on Chinese goods, which shaved nearly 10% off Bitcoin’s price and reduced its market cap by more than $200 million. Retail traders, per Binance data cited by CryptoQuant, offloaded another 9,200 BTC—worth about $1 billion—on Wednesday alone. Binance’s Retail Traders Daily Buy/Sell chart illustrated repeated selling spikes aligned with intraday price drops throughout October, underscoring leveraged short-term trading as a volatility amplifier.
Bitcoin exchange activity on Binance. Source: CryptoQuant.Two FOMC members dissented from the rate decision: Kansas City Fed President Jeffrey Schmid advocated holding rates steady, while Stephen Miran, on leave from the White House Council of Economic Advisers, favored a more aggressive 0.5 percentage point cut. This internal division, following September’s initial reduction, was anticipated to boost risk assets like Bitcoin. Instead, it fueled uncertainty, with Cryptopolitan reporting $377 million in liquidations over 24 hours. Binance founder Changpeng Zhao, known as CZ, echoed the bearish sentiment in a public statement: “Many dips along the way,” cautioning investors of ongoing volatility.
First red October in 7 years $BTC pic.twitter.com/WVG4jmpsn4
— Inmortal (@inmortalcrypto) October 30, 2025
Post-dip, Bitcoin bottomed at $106,993 on Thursday before rebounding above $107,300 and edging toward $109,000 by early Friday. This partial recovery, driven by dip-buying from resilient holders, aligns with historical patterns where short-term panics give way to accumulation. Sources like Arab Chain highlight whale withdrawals from Binance, reducing available supply and fostering neutral sentiment. Overall, the episode underscores the crypto market’s sensitivity to macroeconomic cues, yet on-chain evidence points to enduring strength among committed investors.
Frequently Asked Questions
What triggered the $300 million liquidations in the crypto market after the FOMC meeting?
The liquidations stemmed from Jerome Powell’s cautious speech following the Fed’s 0.25% rate cut, which dashed hopes for aggressive easing and prompted a rapid selloff in Bitcoin and other assets. Short-term traders using leverage were hit hardest, resulting in $377 million wiped out in 24 hours, as reported by market trackers.
Is the Bitcoin dip after Fed rate cut a sign of a long-term bear market?
No, on-chain data indicates this was primarily a shakeout of short-term speculators, with long-term holders showing minimal selling activity. Analysts from CryptoQuant observe that while prices dipped below $107,000, the scarcity index is rising due to whale accumulations, suggesting a temporary correction rather than a sustained downturn.
Key Takeaways
- Fed’s Cautious Tone Dominates: Powell’s FOMC speech overshadowed the rate cut, fueling uncertainty and immediate liquidations exceeding $300 million.
- Short-Term vs. Long-Term Behavior: Over 10,000 BTC from recent holders entered exchanges, but diamond-handed investors held firm, preserving market structure.
- Broader Influences at Play: Trump’s tariff threats contributed to October’s red trend, marking Bitcoin’s worst monthly performance in seven years—consider diversifying amid volatility.
Conclusion
The Bitcoin dip after Fed rate cut exemplifies how central bank decisions can swiftly impact digital assets, with Powell’s remarks triggering widespread liquidations and a temporary plunge below $107,000. Yet, on-chain insights from sources like CryptoQuant and Binance reveal a market shakeout rather than fundamental weakness, bolstered by long-term holder resilience. As geopolitical factors like tariff threats linger, investors should monitor scarcity trends and accumulation signals for signs of rebound. Stay informed on evolving monetary policies to navigate future volatility in the crypto space.
Source: https://en.coinotag.com/bitcoin-faces-further-dips-after-fed-rate-cut-cz-signals-ongoing-volatility/